It’s that time of year again! September is Life Insurance Awareness Month, and we want to remind you why buying life insurance should be at the top of your to-do list. Life insurance isn’t just for covering your funeral costs. It should be a staple in every family’s risk management and financial planning.
There are typically certain times in our lives when we start thinking about the importance of life insurance, whether that be obtaining a new policy or adding additional coverage: getting married, having children, starting a business, and co-signing loans for college tuition. While these are all noteworthy times to be thinking about this essential coverage, there other situations you may not have considered that are critical to keeping you and your family financially secure.
There has been a lot in the news about the growing costs of childcare, and any working parent can attest to the growing concern about childcare affordability. According to the Society for Human Resource Management (SHRM), “Families spent 24 percent of their household income on childcare in 2023, according to a new survey of 2,000 parents by Care.com. For perspective, the U.S. Department of Health and Human Services considers 7 percent of household income to be an affordable price for childcare.” The survey also found that roughly 35 percent of parents relied on their savings account to cover childcare costs, and 68 percent of those parents said that they have 6 months or less until this money is depleted.
These staggering statistics show just how critically important stay-at-home caretakers are to the family dynamic and its financial security. Families, especially those with dependents, are quicker to secure policies for the primary wage earner in the household recognizing how that lost income would be detrimental to the family’s well-being, but if your household includes a parent that stays at home to care for the children, you may want to seriously consider a life insurance policy for them as well. If the primary caretaker for your children were to pass away, would the surviving spouse have the financial capability to pay for the childcare costs in their absence? The right insurance coverage will provide the necessary financial security for all your family members.
What Types of Life Insurance Policies Should I Consider?
Permanent Life policies offer lifelong protection along with a cash value accumulation on a tax-deferred basis. This cash account can be used for a variety of purposes, from helping you out of a tight financial spot to providing funds for a personal opportunity to supplement your retirement income. Premiums are generally higher than what you would pay for a Term policy with the same face amount.
Permanent Life insurance falls into two main categories. WHOLE LIFE insurance policy premiums remain the same for life, and the death benefit and rate of return on the cash value are guaranteed. UNIVERSAL LIFE offers the flexibility of varying the amount of premium payments and, thus, the policy’s cash value. It also offers the certainty of a guaranteed minimum death benefit as long as your premiums are sufficient to sustain it. If you do not maintain those minimum premium payments, your death benefit can be reduced.
Term Life policies provide protection for a specific period of time (the term) and are designed for temporary circumstances. They make the most sense when your need for coverage disappears at some point, such as when your children graduate from college or when a debt is paid off. Level Term policies can provide coverage in increments of five-year periods that can run from ten to 30-year plans. Typically, Term Life insurance offers the greatest amount of coverage for the lowest premium and can be a good choice for young families on a tight budget.
Contact a Brooks, Todd & McNeil Agent Today!
If you’ve been considering a life insurance policy, don’t delay! Life insurance protection is invaluable to you and your family and offers peace of mind that your loved ones will be taken care of when you’re gone. Brooks, Todd & McNeil are here to help walk you through the process. Our agents work with multiple carriers and can help find the right insurance company and policy to fit your needs both now and as your life circumstances change. To learn more about our products and services, contact us today at (800) 448-4567.